The federal government and Gov. Jerry Brown decided that the Madera County location along Highway 99 has historic ties to the 1,900-member tribe.
Opponents say the off-reservation casino sets a precedent that could lead to Las Vegas-style gambling in urban areas. Concerned lawmakers are forming a panel to study the issue.
AB277 also ratifies an agreement with the Wiyot tribe, which agreed not to open a casino on its Humboldt County property if it receives a portion of the revenue from the Madera County casino.
The Senate approved the compact 22-11 Thursday, sending it to Brown for his signature.